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A Guide To Repairing Your Finances Post-College

When you are at college you can do the responsible thing, work hard and make sure that you come out with a qualification and some savings along with a shining financial record… Or you can do what 99% of college students do, the exact opposite.

I’m not going to tell you what you should do, or should have done, but assuming you aren’t/weren’t so diligent, you have probably come out of college with (hopefully) a degree and (unfortunately) a lot of debt.

So rather than beat yourself up about it, let’s get started fixing up your finances shall we?

What Are Your Goals?

This may be obvious, but to get anywhere in life you need to set goals, so let’s do that shall we?

Goal 1 is to pay off all of your outstanding debt Goal 2 is to repair your credit score

So the first step of course is to get a job and an income and then to start figuring out what debts you have and which to pay off first.

Leveraging Debt

Your priority should always be to pay off the most expensive debt first, and also the most damaging debt – for instance, pay off store cards urgently, and then cut them up and cancel them.

If you have access to cheap debt it makes sense to max out that debt in order to pay off your more expensive debts – as long as you have the discipline to not let that debt spiral. So for instance, you if you have a few hundred extra in your overdraft, use that credit to pay off your credit cards and consolidate.

It is always a good idea to leave yourself a small buffer of course in that over draft in case of unexpected costs, going past your limit will damage your finances further.

Credit Card Debt

It is good for your finances to have a single credit card, especially if you can regularly use it and pay it off each month. Make sure you stay within your limits and avoid any penalties though.

If you have balances that have been there for a while and are accumulating interest make sure you pay them off – they are costing you money and don’t look good on your credit file either.

Using credit cards is only beneficial if you use them right, so stay on top of it, pay it off every week if you need to and check your balance twice a week. If you lack the self-control, then just cancel the card and save yourself.

Be Obsessive

It is easy and tempting to bury your head in the sand when money is tight, but not looking at the problem doesn’t make it better (in fact it makes it worse). You should log on to your internet accounts at least twice a week to make sure you know what money is available.

Accidentally going overdrawn or missing payments is a disaster for your finances, so you need to look out for those things and prevent them.

That’s It!

It’s not rocket science really, if you know what your finances look like you will be able to manage them better. If you regularly note what your money is being spent on you will be more financially responsible without even trying.